In daily life, in addition to providing insight into tax dynamics through the release of tax related documents, the release of hot news and typical cases also reveals tax related information. "Tax Eyes Watch News" aims to extract and interpret tax related information from news or tax documents and share it with readers.

1、 Looking at the Trend of Tax System from the Report of the 20th National Congress

On October 25th, the full text of the report of the 20th National Congress of the Communist Party of China was released. From the tax related content, we can predict the future trend of the tax system. Details are as follows:
Original text: Accelerate the construction of a new development pattern and strive to promote high-quality development. We will improve the modern budget system, optimize the tax structure, and improve the financial transfer payment system.
Analysis and prediction: the key word is "optimizing the tax system structure". This means that in the future, China will also be committed to the construction of the local tax system, the spread of real estate tax collection, the introduction of new taxes, and the optimization of the existing tax system will continue to advance.

Original text: Improve people's wellbeing and quality of life. We will strengthen the regulation of taxes, social security, and transfer payments. We will improve the personal income tax system, standardize the order of income distribution, standardize the wealth accumulation mechanism, protect legitimate income, regulate excessive income, and ban illegal income.

Analysis and prediction: key words: "improvement, standardization, protection, regulation, prohibition". This means that China will also continue to improve the provisions of the individual income tax law and increase the investigation and punishment of illegal acts such as evasion of individual income tax.

Original text: Promote green development and promote harmonious coexistence between human and nature. We will improve the fiscal, tax, financial, investment, and pricing policies and standard systems that support green development, develop green and low-carbon industries, improve the market-oriented allocation system of resources and environmental factors, accelerate the development, promotion, and application of advanced technologies for energy conservation and carbon reduction, advocate green consumption, and promote the formation of green and low-carbon production and lifestyle.

Analysis and prediction: key word "green and low-carbon". This means that the state will grant greater tax incentives to green and low-carbon industries and issue relevant tax preference documents.

2、 Electronic cigarettes are included in the scope of consumption tax collection, and relevant industries should make timely adjustments

The Announcement of the General Administration of Taxation of the Ministry of Finance and the General Administration of Customs on the Levy of Consumption Tax on Electronic Cigarettes, issued on October 25th, incorporated electronic cigarettes into the scope of consumption tax collection. It is stipulated that "entities and individuals that produce (import) and wholesale electronic cigarettes within the territory of the People's Republic of China are consumption tax payers, and electronic cigarettes are subject to ad valorem tariff calculation and tax payment. The tax rate for the production (import) link is 36%, and the tax rate for the wholesale link is 11%."

Analysis and prediction: Compared with the traditional tobacco industry, the tax rate of e-cigarettes is not high, but based on the current market size of e-cigarettes, a stable tax source can still be formed. Participants in the production and wholesale segments of electronic cigarettes should timely adjust their business models to adapt to the introduction of consumption tax.

3、 Implementation of the "Regulations on Promoting the Development of Individual Industrial and Commercial Households", Beware of Blind Registration

On October 25, Premier Li Keqiang of the State Council signed a decree of the State Council, promulgating the "Regulations on Promoting the Development of Individual Industrial and Commercial Households" (hereinafter referred to as the "Regulations"), which will enter into force on November 1, 2022. Article 8, Article 3, and Article 20 of the Regulations provide for tax policy support for individual businesses.

Analysis and prediction: Both the promulgation of the "Regulations" and the cases of implementing "audit levy" on individual businesses in many places this year mean that while the state encourages and supports the development of individual businesses, it also places expectations on individual businesses to grow into stable tax sources in the future. Therefore, individual industrial and commercial households should standardize their operations, while enjoying national preferential policies, pay attention to preventing tax risks. Investors should not blindly follow the trend of registration due to the release of new articles.

4、 Enterprises investing in scientific research institutions will enjoy tax incentives

According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Tax Preferential Policies for Enterprises to Invest in Basic Research issued on September 30th, "The expenditures for basic research contributed by enterprises to non-profit scientific and technological research and development institutions (scientific and technological research and development institutions hereinafter referred to as scientific research institutions), universities, and government natural science funds may be deducted before tax based on the actual amount incurred, and may be additionally deducted before tax based on 100%."

Analysis and prediction: The state encourages and supports scientific research institutions and universities to use social funds for scientific research, and also supports enterprises to support the scientific research work of scientific research institutions and universities. Relevant enterprises can make full use of this preferential policy to reduce the tax payable.

5、 Dealing with illegal release of tax related false information by tax related intermediaries in multiple places

Recently, the State Administration of Taxation has published a number of investigations and punishments on the illegal release of tax related false information by tax related intermediaries in the column of tax case notification. Such enterprises have released false tax related propaganda information such as "tax rebate services", "practical and reasonable tax avoidance methods", "secrets to reasonable tax savings", "effectively reducing corporate tax burden", and "how to do tax planning", which distorts the interpretation of tax policies and misleads the public. Eventually, they were dealt with and punished by local tax authorities according to law.

Analysis and prediction: In recent years, tax authorities have increased the investigation and punishment of tax violations relying on multiple information channels such as big data. Enterprises must not rely on the false propaganda of intermediary agencies due to their fluke mentality, resulting in their own situations involving tax violations.